Sprout Network Pty Ltd v Roth [2017] NSWSC 1717

Supreme Court New South Wales

Medium Neutral Citation: Sprout Network Pty Ltd v Roth [2017] NSWSC 1717 Hearing dates: 7 December 2017 Date of orders: 07 December 2017 Decision date: 07 December 2017 Jurisdiction: Equity - Duty List Before: Kunc J Decision: Interlocutory injunction refused Catchwords: Intellectual Property — confidential information — information protected — former employee establishes competing business — no contractual restraint of trade — publicly available email contact details for former employer's clients not confidential Cases Cited: Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317 Category: Principal judgment Parties: Sprout Network Pty Ltd ACN 162 928 118 (Plaintiff)

Julian Roth (Defendant) Representation: Counsel:

D.M. Flaherty (Plaintiff) D. Steirn (Defendant)

Solicitors: The Property Practice (Plaintiff) The Workplace – Employment Lawyers (Defendant) File Number(s): 2017/363933 Publication restriction: No

EX TEmpore Judgment

Summary 1. The defendant ("Mr Roth") was employed by the plaintiff ("Sprout") as its sales manager. Mr Roth's contract of employment had a clause protecting Sprout's confidential information but did not contain a restraint of trade clause. 2. Mr Roth has left Sprout and set up his own business in competition with Sprout. At the time he left Sprout, Mr Roth emailed a number of Sprout's clients from his work computer telling them that he was leaving Sprout. He copied those emails to his private email address thereby leaving himself with the email addresses of those clients. 3. Sprout submits that by copying those emails to himself, Mr Roth breached Sprout's entitlement to keep that information confidential either in equity or pursuant to the terms of Mr Roth's contract of employment. Sprout seeks this interlocutory relief: "1. Order that pending the determination of these proceedings the Defendant (and/or his servants or agents) be restrained from communicating with, approaching or soliciting orders from customers of the Plaintiff whose names and addresses are or were obtained by or became known to the Defendant from records of or information obtained from the records of the Plaintiff ("the Plaintiff's confidential information) or who were clients of the Plaintiff at any time during the Defendant's employment by the Plaintiff. 2. Order pending the determination of these proceedings or until further order that the Defendant by himself, his servants or agents be restrained from copying or showing to any person any customer lists, schedules of prices or any other confidential information of the Plaintiff. 3. An order that the Defendant within 7 days of today deliver up to the Plaintiff the original and all copies of any list of customers or any document or any other form of recording information containing or referring to the names and/or contact details of customers of the Plaintiff together with the original and all copies of any schedule of prices of the Plaintiff." 1. On any view, that relief is far too wide. There is no evidence that Mr Roth has or might have taken customer lists, price lists, or similar confidential information. All the evidence discloses that he has done is to copy to himself emails containing the names and email addresses of those clients. The evidence at the moment is that about 25 to 30 such clients were contacted. 2. Even in relation to the names and email addresses of those clients, for the reasons which follow, I am not satisfied that either in contract or equity there is a sufficiently serious question to be tried that Sprout is entitled to the relief which it seeks on a final basis. In my view, Sprout's case for such relief is weak. Nor does the balance of convenience favour the making of such orders. 3. Mr D M Flaherty of Counsel appeared for the plaintiff. Mr D Steirn of Counsel appeared for Mr Roth.